Marigold Inc. was formed on July 1, 2017. It was authorized to issue an unlimited number of common shares and 100,000 shares of cumulative and non-participating preferred shares carrying a $1.80 dividend. The company has a July 1 to June 30 fiscal year. The following information relates to the company’s shareholders’ equity account.

Common Shares

Before the 2019–20 fiscal year, the company had 110,000 outstanding common shares issued as follows:

1.		94,000 shares issued for cash on July 1, 2017, at $34 per share
2.		4,900 shares exchanged on July 24, 2017 for a plot of land that cost the seller $68,600 in 2007 and had an estimated fair value of $215,600 on July 24, 2017
3.		11,100 shares issued on March 1, 2018; the shares had been subscribed for $40 per share on October 31, 2017

Oct. 1, 2019		Subscriptions were received for 9,800 shares at $45 per share. Cash of $94,500 was received in full payment for 2,100 shares and share certificates were issued. The remaining subscription for 7,700 shares was to be paid in full by September 30, 2020 and the certificates would then be issued on that date.
		Nov. 30, 2019		The company purchased 1,900 of its own common shares on the open market at $43 per share. These shares were restored to the status of authorized but unissued shares.
		Dec. 15, 2019		The company declared a 5% stock dividend at the fair value of the shares for shareholders of record on January 15, 2020 to be issued on January 31, 2020. The company’s common shares were selling at $54 per share on December 15, 2019.
		June 20, 2020		The company sold 490 of its own common shares for $22,540.

Preferred Shares

The company issued 49,000 preferred shares at $47 per share on July 1, 2017.

Cash Dividends

The company has followed a schedule of declaring cash dividends each year in December and June and making the payment to shareholders of record in the following month. The cash dividend declarations have been as follows since the company’s first year and up until June 30, 2020:

Declaration Date		Common Shares		Preferred Shares
Dec. 15, 2018		$0.30 per share		$2.70 per share*
June 6, 2019		$0.30 per share		$0.90 per share
Dec. 15, 2019		—		$0.90 per share
*Includes dividend arrears of $2 from the 2017–18 fiscal year

No cash dividends were declared to common shareholders during June 2020 due to the company’s liquidity problems.

Retained Earnings

As at June 30, 2019, the company’s Retained Earnings account had a balance of $685,000. For the fiscal year ended June 30, 2020, the company reported net income of $39,000.

a.)Prepare the shareholders’ equity section of the company’s SFP as at June 30, 2020, as it should appear in its annual report to the shareholders.

b.) Prepare the journal entries for the 2019–20 fiscal year.